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V. Rishi Kumar

"Most of the cell manufacturers are eyeing the emerging entry-level space, hence you will see more entry-level handsets in the market coming in".

Hyderabad , Oct. 12

WITH the cellular industry growing at nearly a million connections a month, the country has already touched the current calendar year projections of about 17 million. This has opened up a huge market for the cellular handsets and could also possibly see the establishment of a manufacturing base by one of the leading handset makers, Alcatel.

The Managing Director of Alcatel for India and Nepal, Mr Ravi Sharma, told Business Line that the industry was growing at a healthy rate, adding about one million phones a month. "We are constantly evaluating various options, but the establishment of a handsets unit will finally depend on the favourable tax regime, and the volumes the domestic industry will be able to generate."

Earlier, a handset cost above Rs 5,000 with about 20 per cent of sales done in the legal market. In the last five six months, the entire business profile has changed. The number of mobile phone acquisitions across various GSM networks is about a million lines a month, which is principally served by five major manufacturers.

"We were a relatively low key player given the earlier tax structure. Alcatel has recently launched a cost-effective product teaming up with AirTel in Mumbai as a bundled offer for Rs 3,480, which includes a mobile connection and a free Walkman provided by Videocon, the dealer for our handsets."

"With about 15 to 20 million handsets additions per year, Alcatel plans to garner a big pie in about two years," he said.

The Alcatel strategy will depend on the overall volumes the industry will be able to generate over the next three four years. When the services were initially launched in India, 75 per cent of the overall sales were among people who could afford high-end handsets. There is now higher demand for lower-end handsets. "Most of the cell manufacturers are eyeing this emerging space, hence you will see more entry level handsets in the market coming in".

Giving an operator's perspective, Mr Kumar Ramanathan, Chief Operating Officer of Hutchison Essar South, told Business Line that bundling a handset was a global trend where an operator locks the user with a network lock and this was honoured.

"But it is yet to mature in India. We are just beginning to launch such offerings and how this will take off, we can judge after a few months."

A significant part of the handsets market comes from the replacement segment, which is fuelling further growth of handsets.

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